πŸ“’ Too many exams? Don’t know which one suits you best? Book Your Free Expert πŸ‘‰ call Now!

  • google app store apple app store
  • βœ–

      Question

      A company had EBIT of Rs.3,70,000. The interest expense

      was Rs.45,000. The tax rate is 30%. The company paid Rs.31,000 dividend. What is the retention ratio of the firm?
      A 79% Correct Answer Incorrect Answer
      B 84% Correct Answer Incorrect Answer
      C 86% Correct Answer Incorrect Answer
      D 64% Correct Answer Incorrect Answer
      E 68% Correct Answer Incorrect Answer

      Solution

      Retention ratio = (net profit – dividend) / net profit Retention ratio = ( EBIT – interest – tax – dividend) / net profit Retention ratio = (370000 – 45000 – 97,500 – 31,000) / 2,27,500 Β  Retention ratio = 86.37%

      Practice Next
      ask-question